The Equal Pay Act (EPA) — Gender-Based Pay Discrimination

The Equal Pay Act (EPA) is a federal law which prohibits employers from discriminating in the payment of wages based on employee gender. While this may seem to duplicate the protections offered under Title VII (even though the EPA was passed a year before Title VII), there are significant differences between the two laws. The types of employers and employees covered, the time and manner for bringing claims, the burden of proof and the damages available differ between the EPA and Title VII. Whether your particular case is better served by an EPA claim or Title VII will depend on its particular facts. Luckily, many employees can sue under both statutes and get the best of both worlds.

Equal Pay Act — What Employers and Employees are Covered?

The Equal Pay Act applies to almost all employers, as it does not have a “minimum number of employees” requirement (unlike Title VII, which requires a minimum of 15 employees). The EPA only covers discrimination in pay based on gender, and is available to both male and female employees.

Equal Pay Act — Proving a Violation

To prove a violation of the Equal Pay Act, a plaintiff does not need to show that the difference in pay between male and female employees is the result of intentional discrimination (unlike Title VII). Rather, to make a prima facie case (enough of a case to avoid dismissal) under the EPA, a plaintiff must show that he or she receives less pay than an employee of the opposite sex who (1) works at the same establishment (it’s not enough that they work for the same company at different locations), (2) performs substantially equal work (regardless of job title), (3) under substantially equal working conditions (such as physical/environmental surroundings and hazards).

“Pay” under the Equal Pay Act is not limited to just base wages. It also includes overtime pay, bonuses, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits.

After the employee makes a prima facie case under the EPA, the employer can avoid liability by proving that the pay differential is due to one of the following factors:

a seniority system;

a merit pay system;

a system which measures earnings by quantity or quality of production; or

a differential based on any factor other than sex.

The fourth factor is a “catch-all” provision which allows employers to explain pay differentials which can’t be explained under the first three factors, but are nevertheless “gender neutral” and business related. An example of an “other factor” that was rejected is a “supply and demand” argument, in which the employer argued that market forces required that it pay men more than women. An example of an “other factor” that was accepted is a case involving an employer that only offered spousal health insurance to employees whose spouses earned less than the employee (as this would apply equally to male and female employees).

Some employers have tried to evade EPA claims by creating different job titles for female employees who perform substantially the same work as male employees. This does not work, as the EPA looks to the actual work performed by the employees, and not job titles, when deciding if two employees perform substantially equal work.

Equal Pay Act — Damages

Unlike Title VII, the EPA does not allow plaintiffs to recover compensatory or punitive damages. Damages under the EPA are limited to:

back pay (including compensation for all forms of pay, such as lower benefits);

an order that the plaintiff’s pay be raised to the level of the opposite-sex counterpart — note than the EPA prohibits an employer from reducing the other employee’s pay instead;

attorney’s fees; and

liquidated damages equal to the amount of the back pay awarded.

Back pay in the case of a non-willful violation can be awarded for a period of up to 2 years prior to the filing of the EPA complaint. In the case of a willful violation, this is extended to up to 3 years.

Your attorney’s fees will be calculated by multiplying the reasonable number of hours your attorney spent on your case by an hourly rate determined by looking at rates charged by attorneys with similar skill and experience. It is calculated this way regardless of whether the attorney took your case on a contingency fee — you will never be awarded 33 or 40% of your damages as attorney’s fees by the court. The amount you actually have to pay your attorney will be governed by your fee contract, which may provide that he be paid the larger of (1) the court’s awarded fee or (2) the percentage in the contract, applied to the combined total of your damages and fees awarded.

Equal Pay Act — How and When to File a Claim

Unlike Title VII, the Equal Pay Act does not require plaintiffs to file a charge with the EEOC before filing a lawsuit. Rather, EPA claims are subject to a 2 year statute of limitations, which is extended to 3 years in the case of a “willful violation” (when the employer knowingly violates the EPA or acts in reckless disregard for it). While a plaintiff can choose to file an EEOC charge for an EPA violation, doing so does not extend the statute of limitations.

Equal Pay Act — Retaliation Claims

As with all federal employment discrimination laws, the EPA prohibits an employer from retaliating against an employee who asserts his or her rights under the Equal Pay Act (this need not be the filing of a lawsuit or EEOC charge — a complaint to the employer itself will suffice). If an employer takes a materially adverse employment action against an employee asserting his or her rights under the EPA, it can be liable for a broader array of damages than it would be in a standard equal pay claim under the EPA — this is mainly due to the fact that EPA lawsuits only allow recovery of damages for lower pay, whereas retaliation can involve more severe employment action, such as termination.

In a retaliation claim under the EPA, an employee can recover, in addition to the relief awarded for the underlying EPA violation, compensatory damages (including emotional distress) and punitive damages. Compensatory damages in an EPA retaliation case are handled like a combination of “front pay” and compensatory damages in a Title VII case, including the employer’s ability to raise a “failure to mitigate damages” defense. These damages are meant to restore the plaintiff to the position he or she would have been in had the retaliation not occurred.

Punitive damages can be awarded in an EPA retaliation case where the employer showed malice or a reckless indifference to the employee’s rights under the EPA. They are more likely to be awarded when a managerial-level employee is directly involved in the retaliatory conduct.

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